AI Chatbot Market Size, Share, Opportunities, And Trends By Component (Hardware, Software And Services), By Deployment (Cloud, On-Premises), By Industry Vertical (BFSI, Media & Entertainment, Education, Retail, Healthcare, Others) And By Geography - Forecasts From 2024 To 2029
- Published : Sep 2024
- Report Code : KSI061614383
- Pages : 140
The AI chatbot market is expected to grow at a CAGR of 24.53%, reaching a market size of US$46.641 billion in 2029 from US$15.572 billion in 2024.
An AI chatbot is a virtual computer program powered by artificial intelligence (AI) that is made to mimic conversations with human beings through the internet. Different technologies and methods can be applied in building them among which are: natural language processing (NLP) and machine learning (ML). Different categories of chatbots exist, such as rule-based and self-learning. Rule-based chatbots require pre-defined rules in handling queries; therefore, they use explicit decision trees. On the contrary, self-learning chatbots depend on AI and ML to learn from their interactions with customers and improve their responses over time.
Companies and corporations often utilize them for automating mundane activities while enhancing customer interactions. Furthermore, they might be merged with mobile applications and messaging platforms, providing users with swift and easy entry points for data and services. For example, they integrate into e-commerce sites, supporting users through product recommendations, ordering, and tracking delivery. In addition, they also serve students with swift access to information, answer questions, and support the learning process. In the same way, they can support citizens who want information about government services such as renewing driving licenses or paying taxes.
What are the AI chatbot market growth drivers?
- Increasing demand for automation is anticipated to propel the market growth
AI chatbots are a cost-effective solution for customer service and other business process automation since they provide customer support at all times, thereby giving fast responses. They can handle multiple customer interactions at the same time to reduce human staff demand and save organizations costs. They are also flexible solutions for organizations with changing customer needs because they can be adjusted up or down depending on requirements, hence increasing operational efficiency. Additionally, they can automate repetitive processes to allow human employees to handle more complex tasks instead.
Furthermore, it contributes to e-commerce by collecting data for analysis, generating leads, and enhancing customer engagement through personalized discounts or recommendations and order tracking, among others. Therefore, this urge towards automation is fueling the AI chatbot market expansion. For example, H&M applies an AI chatbot that assists clients in product selection, ordering, and shipment tracking activities. The bot also solves commonly arising questions from clients and offers directions on how to proceed with an issue.
- Advancement in AI technology is anticipated to drive market growth
No other technology has advanced more in recent years than artificial intelligence, particularly in natural language processing. Nowadays, chatbots can be linked with different systems, such as websites, mobile apps, or messaging platforms, improving safety by eliminating information leakage and guaranteeing user confidentiality. Chatbots allow businesses to understand their client’s needs, saving them money on promotions and workforces.
- Increasing use of messaging applications
This market growth is expected because messaging apps are more popular than social networking sites. There will be a significant market in the future for chatbots that work with these messaging apps. The number of application-to-person automated messages is predicted to increase dramatically because these messages can automate tasks like making hospital appointments, checking flight status, placing orders for eCommerce sites, and finding the best deals with just a single message click. People will get more accustomed to automated customer service than to the email or IVR services offered by the majority of businesses because it offers prompt solutions.
- Increased penetration of payment services using chatbots is raising their demand
They use artificial intelligence to interpret human language, enabling them to chat like humans. These programs can be plugged into messaging platforms such as Facebook Messenger, Skype, Slack, or social networks. Paypal can be integrated with an agent, enabling chatbot developers to provide payment services using messaging platforms. The potential for earning commissions from tiny charges is one of the key growth opportunities in the chatbot market.
What are the major challenges restraining AI chatbot market?
- Easy availability of free chatbots is anticipated to impede market growth
A plethora of free platforms are available for creating and implementing pre-built Chatbots with predetermined rules. ChattyPeople, MEOKAY, Botsify, and other well-known platforms let companies create chatbots without knowing how to code. Consequently, small businesses that do not need to solve complex problems prefer chatbots with defined rules over chatbots with AI and NLP capabilities.
Businesses use machine-learned chatbots to keep customers engaged, even in the face of recent technological changes and the need for precise service. Since there is a 92% chance that a disgruntled customer will not return, this is an important issue for businesses. As a result, the majority of businesses still prefer complex chatbots that can cater to their clients' specific needs.
What are the key geographical trends shaping the AI chatbot market?
- Asia Pacific is witnessing exponential growth during the forecast period
Asia Pacific is anticipated to increase market expansion as large companies utilize chatbots for routine customer service responsibilities. The remarkable growth potential of chatbots in several regions can be related to their huge benefits to organizations, such as increased operational efficiency, improved customer satisfaction, and reduced operational expenses. Due to numerous factors, such as their ability to reduce business running costs, increase customer satisfaction, and enhance operational efficiency, the market for chatbots is likely to grow tremendously.
Recent developments in the AI chatbot market
- In July 2024, JPMorgan introduced an internal AI chatbot to carry out activities that research analysts usually handle. With the help of this new AI tool, data processing and analysis will be made easier, leading to more thorough and effective research support.
- In July 2024, users of Elon Musk's platform X now have the option to stop their data from being used to train the AI chatbot Grok. This feature addresses privacy concerns related to AI development by giving users more control over their data. Users can activate this setting to make sure that their data isn't used in AI training procedures.
AI Chatbot Market Scope:
| Report Metric | Details |
| AI Chatbot Market Size in 2024 | US$15.572 billion |
| AI Chatbot Market Size in 2029 | US$46.641 billion |
| Growth Rate | CAGR of 24.53% |
| Study Period | 2019 to 2029 |
| Historical Data | 2019 to 2022 |
| Base Year | 2024 |
| Forecast Period | 2024 – 2029 |
| Forecast Unit (Value) | USD Billion |
| Segmentation |
|
| Geographical Segmentation | North America, South America, Europe, Middle East and Africa, Asia Pacific |
| List of Major Companies in AI Chatbot Market |
|
| Customization Scope | Free report customization with purchase |
The AI chatbot market is analyzed into the following segments:
- By Component
- Hardware
- Software and Services
- By Deployment
- Cloud
- On-Premises
- By Industry Vertical
- BFSI
- Media & Entertainment
- Education
- Retail
- Healthcare
- Others
- By Geography
- North America
- USA
- Canada
- Mexico
- South America
- Brazil
- Argentina
- Others
- Europe
- Germany
- France
- United Kingdom
- Spain
- Others
- Middle East And Africa
- Saudi Arabia
- UAE
- Israel
- Others
- Asia Pacific
- China
- Japan
- India
- South Korea
- Indonesia
- Thailand
- Taiwan
- Others
- North America
Frequently Asked Questions (FAQs)
The AI chatbot market is projected to reach a total market size of US$46.641 billion in 2029.
The global AI chatbot market is projected to grow at a CAGR of 24.53% over the forecast period.
AI Chatbot Market is valued at US$15.572 billion in 2024.
Increasing demand for automation is a major factor driving the AI chatbot market growth.
The Asia-Pacific (APAC) region is expected to witness significant growth in the AI chatbot market.
1. INTRODUCTION
1.1. Market Overview
1.2. Market Definition
1.3. Scope of the Study
1.4. Market Segmentation
1.5. Currency
1.6. Assumptions
1.7. Base and Forecast Years Timeline
1.8. Key Benefits to the Stakeholder
2. RESEARCH METHODOLOGY
2.1. Research Design
2.2. Research Processes
3. EXECUTIVE SUMMARY
3.1. Key Findings
3.2. CXO Perspective
4. MARKET DYNAMICS
4.1. Market Drivers
4.2. Market Restraints
4.3. Porter’s Five Forces Analysis
4.3.1. Bargaining Power of Suppliers
4.3.2. Bargaining Power of Buyers
4.3.3. Threat of New Entrants
4.3.4. Threat of Substitutes
4.3.5. Competitive Rivalry in the Industry
4.4. Industry Value Chain Analysis
4.5. Analyst View
5. AI CHATBOT MARKET BY COMPONENT
5.1. Introduction
5.2. Hardware
5.3. Software and Services
6. AI CHATBOT MARKET BY DEPLOYMENT
6.1. Introduction
6.2. Cloud
6.3. On-Premises
7. AI CHATBOT MARKET BY INDUSTRY VERTICAL
7.1. Introduction
7.2. BFSI
7.3. Media & Entertainment
7.4. Education
7.5. Retail
7.6. Healthcare
7.7. Others
8. AI CHATBOT MARKET BY GEOGRAPHY
8.1. Introduction
8.2. North America
8.2.1. By Component
8.2.2. By Deployment
8.2.3. By Industry Vertical
8.2.4. By Country
8.2.4.1. USA
8.2.4.2. Canada
8.2.4.3. Mexico
8.3. South America
8.3.1. By Component
8.3.2. By Deployment
8.3.3. By Industry Vertical
8.3.4. By Country
8.3.4.1. Brazil
8.3.4.2. Argentina
8.3.4.3. Others
8.4. Europe
8.4.1. By Component
8.4.2. By Deployment
8.4.3. By Industry Vertical
8.4.4. By Country
8.4.4.1. Germany
8.4.4.2. France
8.4.4.3. United Kingdom
8.4.4.4. Spain
8.4.4.5. Others
8.5. Middle East and Africa
8.5.1. By Component
8.5.2. By Deployment
8.5.3. By Industry Vertical
8.5.4. By Country
8.5.4.1. Saudi Arabia
8.5.4.2. UAE
8.5.4.3. Israel
8.5.4.4. Others
8.6. Asia Pacific
8.6.1. By Component
8.6.2. By Deployment
8.6.3. By Industry Vertical
8.6.4. By Country
8.6.4.1. China
8.6.4.2. Japan
8.6.4.3. India
8.6.4.4. South Korea
8.6.4.5. Indonesia
8.6.4.6. Thailand
8.6.4.7. Taiwan
8.6.4.8. Others
9. COMPETITIVE ENVIRONMENT AND ANALYSIS
9.1. Major Players and Strategy Analysis
9.2. Market Share Analysis
9.3. Mergers, Acquisitions, Agreements, and Collaborations
9.4. Competitive Dashboard
10. COMPANY PROFILES
10.1. IBM
10.2. Nuance Communications, Inc.
10.3. eGain Corporation
10.4. Microsoft Corporation
10.5. Google, Inc. (Alphabet Inc.)
10.6. Creative Virtual Ltd.
10.7. Avaamo Inc.
10.8. Amazon Web Services, Inc.
10.9. Oracle
10.10. LiveChat, Inc.
IBM
Nuance Communications, Inc.
eGain Corporation
Microsoft Corporation
Google, Inc. (Alphabet Inc.)
Creative Virtual Ltd.
Avaamo Inc.
Amazon Web Services, Inc.
Oracle
LiveChat, Inc.
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